It's not always a good thing to know what your coworkers make — here's how GoDaddy is striking a balance between pay secrecy and openness

GoDaddy CEO Blake Irving cheers at the opening bell on
the floor of the New York Stock Exchange in
2015.Spencer
Platt/Getty

A recent
Wall Street Journal article highlights one company's efforts
to revamp their compensation system — including rethinking how
and when to disclose salary information.

GoDaddy, a web-services firm headquartered in Scottsdale,
Arizona, now lets employees know how they stack up against
coworkers in the same position. On their pay statements,
employees see their level and salary range, The Wall Street
Journal reported.

With this decision, GoDaddy appears to have struck a middle
ground between total openness and secrecy around salaries — and
they might be onto something.

While most companies keep people in the dark as to how much their
coworkers earn, others have opted to pull back the curtain. Since
1986,
Whole Foods has allowed employees to look up the salaries of
other employees. More recently, social-media company
Buffer and analytics startup
SumAll joined their ranks.

In Buffer's case, you don't even have to work at the company to
find out what individual employees earn — salaries are posted on
Buffer's public blog.

It's hard to say whether there's a "right" way to go about
disclosing or withholding salary information, and certainly it
depends on the culture of the individual organization.

Research suggests that salary secrecy can hurt workers'
performance, especially when it's unclear how performance relates
to pay.

At the same time, studies have found that people generally prefer
some degree of privacy around their financial information — in
fact, researchers
suspect that people's desire for secrecy would override their
curiosity about what their coworkers make.

Elena
Belogolovsky, an assistant professor of human resource
studies at Cornell University, has spent years studying the
effects of pay secrecy and transparency in organizations. Her
conclusion?

"My personal belief is that you don't have to disclose [salary]
information for every single person in the company," she told
Business Insider. "But what you need to do is make the system
more transparent. You need to provide people with information on
what they can do to make more."

"Pay is not just about numbers," she added.

Belogolovsky thinks GoDaddy's system of revealing salary range
and level — without making individual salaries publicly available
— is sensible. As long as the company makes it clear how you can
rise to the top of that range, the system should work.

Indeed, in an interview with Business Insider, Matt Toeller,
GoDaddy's Vice President of Total Rewards and HR Operations, said
the company has made "leveling guides" available to all its
employees since they rolled out the new compensation system in
January.

These guides show workers the key indicators of success at their
level, and what competencies will help them progress to the next
level.

Toeller said his personal opinion is that complete salary
transparency isn't always productive.

"I don't think it's beneficial for the company to post everyone's
salary, 5,000 people on the internet," he said. "Some people
prefer to keep their salary private and some people want to make
it public. I believe since we're all adults, they can choose to
do that."